<PAGE>
GT GLOBAL
OVER 25 YEARS
OF INVESTING
WORLDWIDE
GT GLOBAL
EUROPE
GROWTH FUND
SEMIANNUAL REPORT
JUNE 30, 1997
[LOGO]
<PAGE>
TABLE
OF CONTENTS
<TABLE>
<S> <C>
Message from the
Chairman............. 1
Report from the Fund
Managers and Key
Portfolio Holdings... 2
Financial
Statements........... F1
The views of the Fund's manage-
ment as described in this report
are as of the date it was
written. Portfolio holdings and
allocations are as of June 30,
1997, unless otherwise noted.
Views, portfolio holdings and
allocations may have changed
subsequent to these dates.
</TABLE>
<PAGE>
MESSAGE FROM THE CHAIRMAN
Dear Investor,
This report is written in a style we hope you find enjoyable to read and easy
to understand. Our intention is to provide our shareholders with meaningful
information about the relative performance of GT Global Mutual Funds. We
think it is important to help investors develop a global perspective about
their investments, including developments in individual economies around the
world. Specifically, we address how macroeconomic and political events within
countries influence investment results and, ultimately, Fund performance.
In this semiannual report, we describe our management process and offer
insights into the Fund's investment strategy. Companies and countries in
which the Fund invests are discussed, as well as issues pertinent to
decisions affecting the Funds. Biographical information on portfolio
managers' background and experience is also included, and through our
question and answer format, we make it possible for shareholders to be
included in the thought processes that form the basis of their investment
decisions. Additionally, we have included performance illustrations that show
the historical returns of a hypothetical investment and compare it to an
appropriate benchmark.
We make every effort to communicate as clearly as possible because we want
you, our shareholders, to have a useful understanding of what is happening
with your investments in GT Global Mutual Funds, and why.
We would also like to emphasize that today--as global investing continues to
become increasingly complex, information travels as quickly as a keystroke,
and critical decisions must be made within shorter time frames--prudent
advice, professional management, global diversification and investing for the
long term have never been more important.
As always, we appreciate and value our shareholders in GT Global Mutual Funds.
Sincerely,
/s/ William J. Guilfoyle
William J. Guilfoyle
CHAIRMAN OF THE BOARD AND PRESIDENT
GT GLOBAL MUTUAL FUNDS
1
* * *
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
PERFORMANCE SUMMARY
INVESTMENT OBJECTIVE AND CURRENT STRATEGY
The GT Global Europe Growth Fund seeks long-term capital growth by investing
primarily in the equity securities of issuers from European countries. Over
the long term, we tend to favor growth-oriented companies increasing their
share of market capitalization.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GT Global Europe Growth Fund Class A MSCI Europe Index
<S> <C> <C>
7/19/85 $9,525 $10,000
9,535 10,191
9,563 10,717
10,068 10,897
10,954 12,111
11,763 13,063
12,992 13,637
12,897 13,902
13,907 15,559
15,059 16,837
16,116 18,408
14,621 16,786
15,288 17,524
15,859 17,380
17,278 19,328
16,659 18,110
16,678 18,227
17,831 19,210
18,317 19,700
19,421 20,577
20,498 21,319
21,210 22,379
22,050 23,263
22,373 23,141
22,778 23,809
24,175 24,617
25,187 24,829
26,077 24,999
19,560 20,254
18,643 19,371
19,523 20,507
18,945 19,674
19,775 20,840
19,913 21,422
20,077 21,829
19,737 21,430
20,139 21,222
19,901 21,278
19,285 20,320
20,224 21,433
21,437 23,428
21,315 23,725
21,692 23,860
22,962 24,734
22,655 24,462
23,199 24,648
24,426 25,341
24,161 24,052
24,984 25,053
26,742 28,012
27,342 27,671
28,374 28,156
26,226 26,320
27,956 27,792
30,522 30,793
30,355 30,722
29,853 29,997
31,164 30,432
30,271 29,636
31,555 32,061
32,392 33,200
33,815 34,612
29,490 31,192
25,668 27,532
27,035 29,866
26,505 30,179
26,031 29,756
26,533 30,771
2/28/91 28,542 33,477
27,760 31,245
27,286 30,929
27,732 31,854
26,282 29,191
27,230 31,226
27,230 31,808
27,147 32,774
26,114 32,098
25,110 31,357
27,157 33,821
27,044 33,824
27,242 33,969
26,647 32,793
27,695 34,615
28,601 36,599
27,723 35,931
26,506 34,662
26,279 34,564
24,410 34,008
23,079 31,648
23,759 31,646
24,099 32,385
24,127 32,452
24,495 32,836
25,373 34,537
26,109 35,312
26,534 35,704
26,647 35,194
27,355 35,326
29,592 38,437
28,459 38,330
29,592 39,938
28,771 39,088
30,923 42,034
33,062 44,186
31,465 42,633
30,010 41,439
31,151 43,168
29,496 41,345
28,983 40,925
30,837 43,083
31,322 44,463
29,867 42,714
30,723 44,589
29,325 42,895
29,129 43,153
28,432 42,830
28,490 43,815
27,851 45,865
29,100 47,349
29,738 48,335
30,261 48,808
31,975 51,370
31,103 49,401
32,149 50,911
31,800 50,689
31,626 51,067
31,999 52,703
32,117 53,064
33,441 54,049
34,470 54,714
34,911 55,129
35,911 55,573
36,529 56,204
34,294 55,520
35,499 57,187
36,146 58,409
36,411 59,785
37,764 62,834
38,274 64,070
38,511 64,262
39,105 65,130
39,818 67,253
38,719 66,938
39,966 69,816
6/30/97 41,926 73,328
</TABLE>
The chart above shows the performance of the GT Global Europe Growth Fund,
Class A shares, since the Fund's inception, versus the MSCI Europe Index.
This represents a cumulative return of 319.26% and an average annual total
return of 12.75% for the Fund. The chart assumes a hypothetical $10,000
initial investment in the Fund's Class A shares and reflects all Fund
expenses and the maximum 4.75% sales charge. A $10,000 investment in the
Fund's Class B shares at inception on April 1, 1993, would have been valued
at $15,790 on June 30, 1997. This figure reflects all Fund expenses and the
applicable contingent deferred sales charge (5% in the first year, decreasing
to 0% after six years), assuming a complete redemption at the end of the
period. A $10,000 investment in Advisor Class shares at inception on June 1,
1995, would have been worth $14,206 on June 30, 1997.
AVERAGE ANNUAL TOTAL RETURNS%(1)
JUNE 30, 1997
Share Class Without Sales Charge(2) With Sales Charge
1-Year 5-Year 10-Year LOF 1-Year 5-Year 10-Year LOF
Class A(3) 14.77 8.62 6.29 13.21 9.32 7.57 5.77 12.75
Class B(3) 14.09 N/A N/A 11.69 9.09 N/A N/A 11.36
Advisor Class(4) 15.09 N/A N/A 18.37 N/A N/A N/A N/A
HISTORICAL PERFORMANCE(2)
ANNUAL TOTAL RETURNS % (LAST 10 YEARS)
<TABLE>
<CAPTION>
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A 6.59 11.11 40.71 -14.72 4.33 -11.26 28.32 -5.80 9.86 19.61
Class B N/A N/A N/A N/A N/A N/A 20.50(3) -6.38 9.20 18.79
</TABLE>
(1) Figures assume reinvestment of all dividends and capital gain
distributions at net asset value.
(2) Performance data do not reflect the maximum 4.75% sales charge and the
contingent deferred sales charge (5% in the first year, decreasing to 0%
after six years) for Class A and Class B shares, respectively, which, if
included, would have reduced performance quoted.
(3) The Fund began operations (Class A shares) on July 19, 1985; Class B
shares commenced on April 1, 1993.
(4) The Fund began offering Advisor Class shares on June 1, 1995. Advisor
Class shares are not sold directly to the general public and are only
available through certain employee benefit plans, financial institutions and
other entities that have entered into specific agreements with GT Global.
Please see the "Alternative Purchase Plan" section in the Fund's prospectus.
The above data represent past performance of the Fund's shares, which does
not guarantee future results. The investment return and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
2
* * *
<PAGE>
INTERVIEW WITH PORTFOLIO MANAGER
ANNA POWELL
Q HOW DID THE FUND PERFORM?
A While the Fund has participated in the general rally of European stock
markets, our strong gains in Switzerland and Sweden were overshadowed by weak
security selection in the UK and Italy, resulting in a total return of 9.54%
for Class A shares (4.34% including the maximum 4.75% sales charge) for the
six months ended June 30, 1997. Total return for Class B shares was 9.27%
(4.27% including the 5% maximum contingent deferred sales charge). The Morgan
Stanley Capital International (MSCI) Europe Index(5) returned 14.45% over the
same period.
Q WHICH COMPANIES WERE PARTICULARLY DISAPPOINTING?
A In the UK, both Premier Farnell and Reuters disappointed on corporate
results. This called into question long-term growth rates, and therefore the
Fund has subsequently sold shares of both companies (Reuters was sold just
after the end of the reporting period). In Italy, Gucci, the luxury goods
company, suffered from the weakness of the yen and the resulting impact on
Japanese spending. However, the ability of the group to grow sustainably
above the market by expanding product segments and increasing retail space
has not changed, and we believe the recent underperformance will reverse.
Q WHAT WAS THE INVESTMENT ENVIRONMENT LIKE OVER THE PERIOD?
A Most major European markets rose to near all-time highs as interest rates
trended down (with the exception of the UK), and investors focused on the
potential for accelerated growth over the next year. The European Commission
forecast that GDP growth should increase from 1.6% in 1996 to 2.4% in 1997
and 2.8% in 1998 for the EU (European Union) as a whole. The profits of many
larger European companies were also buoyed by the strength of the U.S. dollar
and UK sterling. Since the beginning of 1996, the dollar has rallied by over
10% against major continental European currencies and, at around DM2.93,
sterling is at its highest rate since mid-1992, providing an additional
fillip to continental exporters' earnings. The Swiss market, encouraged by a
fall in interest rates to their lowest level since 1979, was the
top-performing market in dollar terms over the first half of the year. Stock
market strength also came from the benefits many larger corporations have
enjoyed as a result of mergers, de-mergers, wholesale restructuring and other
measures taken over the last two years to boost profitability.
Q WERE THERE ANY SHIFTS IN THE FUND'S STRATEGY OVER THE PERIOD?
A As markets have rerated, we have been taking money out of strong growth
sectors where we felt valuations were full. For example, we took gains in a
number of companies that had reached attractive price levels such as
Carrefour, Wolters Kluwer and Sodexho. We subse-
Continued p.4
VALUE IN EUROPEAN EQUITIES
MSCI U.S. MSCI Europe
P/Cash Flow 13.2 10.5
P/Book Value 3.85 2.84
WHILE EUROPEAN COMPANIES HAVE APPEARED UNDERVALUED RELATIVE TO U.S. COMPANIES
FOR SOME TIME, PRIMARILY AS A RESULT OF LOWER PROFITABILITY, WE BELIEVE
CATALYSTS FOR CHANGE ARE IN PLACE. A FAVORABLE ECONOMIC CYCLE AND HEIGHTENED
MANAGEMENT FOCUS ON CREATING SHAREHOLDER VALUE THROUGH ASSET SALES AND
CONCENTRATION ON CORE BUSINESSES BODE WELL FOR EUROPEAN SHARE PRICES. IN
ADDITION, INCREASED MERGER AND ACQUISITIONS ACTIVITY IS LEADING TO
IMPROVEMENTS IN PROFITABILITY.
Source: Morgan Stanley Capital International, June 30, 1997.
(5) The MSCI Europe index is an arithmetic average, weighted by market value,
of the performance of 563 securities listed on 14 major European stock
exchanges. It includes the effect of reinvested dividends and is measured in
U.S. dollars.
The index is unmanaged, not available for direct investment and does not
include the effects of sales charges and professional management fees.
3
* * *
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGER -- CONTINUED
quently reinvested profits in areas that were restructuring, including
companies such as Alcatel, France's dominant supplier of telecommunications
equipment, and Akzo Nobel, the Dutch chemicals and pharmaceuticals company.
Q WHAT IS THE FUND'S CURRENT INVESTMENT STRATEGY?
A In general, the Fund's investment strategy focuses on particular stocks and
sectors, rather than markets, emphasizing companies offering visibly superior
earnings growth prospects. This reflects our view that in an environment of
global disinflation, investors are likely to seek--and pay premium multiples
for--companies and industries that are expanding.
The portfolio currently includes major companies that are restructuring and
stocks we believe have strong positions in rapidly growing segments of the
media and telecommunications industries. Additionally, we find selected
companies in service industries such as specialist software and temporary
manpower attractive. In this area, we feel companies such as Dassault
Systemes, a European global leader in the software niche of CAD
(computer-aided design software), are presenting particularly attractive
opportunities.
The Fund also seeks out opportunities offered by world class companies that
are leaders in industries such as pharmaceuticals. Key holdings include Glaxo
Wellcome, and companies we think will be beneficiaries of rationalization and
cost-cutting. Of course, continental Europe is also home to many
multinational corporations that have the potential to exploit the growth in
demand for infrastructure and telecommunications equipment in emerging
markets.
Q WHAT IS YOUR POSITION ON FINANCIALS?
A While the Fund is underweighted in financials generally, we maintain a
selective exposure to financial services companies, notably three
Scandinavian banks that are restructuring. We feel these banks are mispriced
and likely to be at the forefront of a European consolidation in the
financial services sector. In Sweden we own Sparbanken and Svenska
Handelsbanken, and in Denmark we own Unidanmark. We feel Europe is massively
overbanked and are finding interesting opportunities in some of the smaller
markets. These markets are beginning to realize that as their customers
become more international and need more services, banks will have to form
cross-border alliances and make other changes to be competitive. So far,
consolidation is taking place in Sweden and Norway, and we believe it will
soon spread to Denmark.
Q WHAT IS YOUR LONGER-TERM OUTLOOK FOR EUROPEAN MARKETS?
A It's important to emphasize that Europe is different from other mature
areas. Looking at a list of the top 10 companies globally in each sector, we
find that in spite of Europe's having an aggregate GDP level comparable to
the U.S., European companies are under-represented. This is because their
markets are more fragmented. However, as European companies realize the need
for economies of scale, we expect more of them to be included. Already, we've
seen a number of big consolidations, particularly in IT (information
technology), services and health care. Moreover, as the concept of
shareholder value and the need to maximize returns continue to gain ground in
Europe, we anticipate increasingly interesting investment opportunities.
ABOUT THE PORTFOLIO MANAGER
ANNA POWELL - Portfolio Manager for Chancellor LGT Asset Management since
1995. Previously, Ms. Powell was a Portfolio Manager of European Equities for
Robert Fleming and a European Equity Analyst for Charterhouse Bank Ltd. She
received her B.A. from Durham University.
GEOGRAPHIC ALLOCATION OF NET ASSETS %
JUNE 30, 1997
Austria 0.3
Denmark 4.5
Finland 6.7
France 17.5
Germany 4.2
Ireland 1.9
Italy 10.2
Netherlands 16.5
Norway 1.3
Portugal 1.6
Spain 2.8
Sweden 11.6
Switzerland 6.4
UK 13.3
U.S., Short Term & Other 1.2
4
* * *
<PAGE>
SECTOR ALLOCATION OF NET ASSETS %
JUNE 30, 1997
Services 27.2
Technology 14.1
Health Care 12.2
Finance 11.0
Capital Goods 8.0
Energy 7.7
Consumer Non-Durables 7.2
Materials/Basic Industry 4.0
Multi-Industry/Misc. 3.7
Consumer Durables 1.5
Short Term & Other 3.4
A complete listing of holdings and allocations may be found in the Financial
Statements section of this report.
<TABLE>
<CAPTION>
GT GLOBAL EUROPE GROWTH FUND % of
KEY PORTFOLIO HOLDINGS Country Net Assets
<S> <C> <C>
TOTAL S.A. Explores for, produces, refines, transports and markets oil and France 3.5
natural gas. The company also operates a chemicals division that produces
rubber, paint, ink, adhesives and resins. Total operates worldwide.
GUCCI GROUP Designs, produces and distributes personal luxury accessories Italy 3.1
and apparel throughout the world. Products include leather goods, shoes, ties
and scarves, among other items.
ADECCO S.A. An international personnel and temporary employment company. Switzerland 3.1
DASSAULT SYSTEMES S.A. Develops computer-aided design, computer-aided France 3.1
manufacturing and computer-aided engineering software products. The company
markets and sells through a relationship with International Business Machines
(IBM).
STET SOCIETA FINANZIARIA TELEFONICA S.p.A. The financial parent company for Italy 3.0
companies operating in the field of telecommunications, manufacturing,
electronics and network construction. The company's subsidiaries are also
active in publishing and telematics information services.
AKZO NOBEL N.V. A worldwide operating company with activities in more than Netherlands 3.0
50 countries. Products include chemicals, man-made fibers, paints, enamels
and salts, ethical drugs, veterinary products, hospital supplies and
diagnostics.
ALCATEL ALSTHOM COMPAGNIE GENERALE D'ELECTRICITE Develops, produces and France 2.9
distributes telecommunication equipment and systems for public network,
business and residential applications. Among other activities, the company
manufactures equipment for electrical power generation, transmission and
distribution networks and railway transportation.
ENTE NAZIONALE IDROCARBURI S.p.A. (ENI) One of the largest oil and natural Italy 2.9
gas companies in the world, with operations in 80 countries. In
petrochemicals, ENI is a European leader in the manufacture of ethylene. ENI
is also a world leader in offshore oil and gas pipelaying.
KONINKLIJKE AHOLD N.V. An international retailing organization focusing on Netherlands 2.9
distributing and selling food products. Ahold also operates specialty stores,
institutional food supply, food production, and wholesaling divisions.
SOL MELIA S.A. A hotel management and franchise company that operates 182 Spain 2.8
hotels in 20 countries. The company manages and franchises hotels under the
names Melia, Sol and Paradisus.
</TABLE>
Source: Bloomberg, August 1997.
5
* * *
<PAGE>
GT GLOBAL
EUROPE
GROWTH FUND
FINANCIAL
STATEMENTS
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
PORTFOLIO OF INVESTMENTS
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (27.2%)
Adecco S.A.{V} ............................................ SWTZ 43,689 $ 16,761,740 3.1
CONSUMER SERVICES
Stet Societa' Finanziaria Telefonica S.p.A. ............... ITLY 2,820,800 16,406,474 3.0
TELEPHONE NETWORKS
Koninklijke Ahold N.V. .................................... NETH 183,287 15,454,342 2.9
RETAILERS-FOOD
Sol Melia S.A. ............................................ SPN 366,400 15,038,806 2.8
LEISURE & TOURISM
Kuoni Reisen Holdings "B" - Registered .................... SWTZ 3,920 13,410,879 2.5
LEISURE & TOURISM
Reed International PLC .................................... UK 1,251,000 12,124,596 2.2
BUSINESS & PUBLIC SERVICES
Vendex International N.V. ................................. NETH 215,739 11,808,525 2.2
RETAILERS-OTHER
VNU (Verenigde Nederlandse Uitgeversbedrijven Verenigd
Bezit) ................................................... NETH 520,000 11,490,835 2.1
BROADCASTING & PUBLISHING
Castorama Dubois Investisse ............................... FR 71,900 10,112,122 1.9
RETAILERS-OTHER
Telecel - Comunicacaoes Pessoais S.A.-/- .................. PORT 103,383 8,576,090 1.6
WIRELESS COMMUNICATIONS
Reuters Holdings PLC ...................................... UK 799,200 8,424,540 1.6
BROADCASTING & PUBLISHING
EMAP PLC .................................................. UK 500,000 6,190,674 1.1
BROADCASTING & PUBLISHING
Seat SpA-/- ............................................... ITLY 2,820,800 901,105 0.2
BROADCASTING & PUBLISHING
------------
146,700,728
------------
Technology (14.1%)
Dassault Systemes S.A. .................................... FR 235,600 16,707,799 3.1
SOFTWARE
Alcatel Alsthom Compagnie Generale d'Electricite .......... FR 127,200 15,921,091 2.9
TELECOM TECHNOLOGY
TT Tieto Oy "B" ........................................... FIN 147,400 12,777,639 2.4
COMPUTERS & PERIPHERALS
Baan Company N.V.-/- {\/} ................................. NETH 156,600 10,785,825 2.0
SOFTWARE
IONA Technologies PLC - ADR-/- {\/} ....................... IRE 521,000 10,289,750 1.9
SOFTWARE
Group Axime-/- ............................................ FR 83,170 9,830,133 1.8
COMPUTERS & PERIPHERALS
------------
76,312,237
------------
Health Care (12.2%)
OY Tamro AB ............................................... FIN 1,781,160 12,352,249 2.3
PHARMACEUTICALS
Schering AG ............................................... GER 108,430 11,582,649 2.1
PHARMACEUTICALS
Novo Nordisk A/S "B" ...................................... DEN 102,900 11,217,116 2.1
PHARMACEUTICALS
</TABLE>
The accompanying notes are an integral part of the financial statements.
F1
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Health Care (Continued)
British Biotech PLC-/- .................................... UK 2,770,000 $ 10,378,851 1.9
PHARMACEUTICALS
Glaxo Wellcome PLC ........................................ UK 385,200 7,954,172 1.5
PHARMACEUTICALS
Genset: ................................................... FR -- -- 1.3
BIOTECHNOLOGY
ADR-/- {\/} ............................................. -- 313,667 6,077,298 --
Common-/- ............................................... -- 14,900 849,119 --
M.L. Laboratories PLC-/- .................................. UK 1,353,707 3,606,880 0.7
PHARMACEUTICALS
Nearmedic Ltd.-/- ......................................... ASTRI 12,364 1,845,749 0.3
PHARMACEUTICALS
------------
65,864,083
------------
Finance (11.0%)
Unidanmark AS "A" ......................................... DEN 235,100 13,203,490 2.4
BANKS-REGIONAL
Sparbanken Sverige AB "A" ................................. SWDN 576,760 12,821,859 2.4
BANKS-REGIONAL
M & G Group PLC ........................................... UK 600,000 12,289,759 2.3
INVESTMENT MANAGEMENT
ING Groep N.V. ............................................ NETH 262,000 12,072,811 2.2
OTHER FINANCIAL
Svenska Handelsbanken, Inc. "A" Free ...................... SWDN 288,900 9,185,653 1.7
BANKS-MONEY CENTER
------------
59,573,572
------------
Capital Goods (8.0%)
Telefonaktiebolaget LM Ericsson "B" ....................... SWDN 323,000 12,712,098 2.4
TELECOM EQUIPMENT
SGL Carbon AG ............................................. GER 80,800 11,060,499 2.1
INDUSTRIAL COMPONENTS
The Rauma Group ........................................... FIN 481,500 11,037,834 2.0
MACHINERY & ENGINEERING
Schneider SA .............................................. FR 151,700 8,069,753 1.5
ELECTRICAL PLANT/EQUIPMENT
------------
42,880,184
------------
Energy (7.7%)
Total S.A. "B" ............................................ FR 188,000 18,991,190 3.5
OIL
Ente Nazionale Idrocarburi (ENI) S.p.A. ................... ITLY 2,754,700 15,549,499 2.9
OIL
Petroleum Geo-Services ASA-/- ............................. NOR 149,900 7,219,316 1.3
ENERGY EQUIPMENT & SERVICES
------------
41,760,005
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F2
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Consumer Non-Durables (7.2%)
Gucci Group - NY Registered Shares{\/} .................... ITLY 260,550 $ 16,772,906 3.1
TEXTILES & APPAREL
Polygram .................................................. NETH 219,300 11,500,967 2.1
RECREATION
Cadbury Schweppes PLC ..................................... UK 1,236,700 11,028,357 2.0
BEVERAGES - NON-ALCOHOLIC
------------
39,302,230
------------
Materials/Basic Industry (4.0%)
Akzo Nobel N.V. ........................................... NETH 119,300 16,339,969 3.0
CHEMICALS
Saes Getters S.p.A.: ...................................... ITLY -- -- 1.0
CHEMICALS
ADR{\/} ................................................. -- 405,600 3,853,200 --
di Risp ................................................. -- 153,900 1,494,791 --
------------
21,687,960
------------
Multi-Industry/Miscellaneous (3.7%)
Incentive AB "A" .......................................... SWDN 140,950 12,752,359 2.4
CONGLOMERATE
Pricer AB-/- .............................................. SWDN 211,463 7,270,151 1.3
MISCELLANEOUS
------------
20,022,510
------------
Consumer Durables (1.5%)
Valeo S.A. ................................................ FR 131,571 8,166,970 1.5
AUTO PARTS
------------ -----
TOTAL EQUITY INVESTMENTS (cost $427,858,993) ................ 522,270,479 96.6
------------ -----
<CAPTION>
NO. OF VALUE % OF NET
WARRANTS COUNTRY WARRANTS (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Astra "A" Call Warrants, expire 10/21/98 .................. SWDN 593,000 7,549,502 1.4
PHARMACEUTICALS
Union Bank of Switzerland Roche Warrants "C", expire
7/98 ..................................................... SWTZ 740,600 4,357,961 0.8
PHARMACEUTICALS
------------ -----
TOTAL WARRANTS (cost $10,061,439) ........................... 11,907,463 2.2
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F3
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated June 30, 1997, with State Street Bank & Trust Co.,
due July 1, 1997, for an effective yield of 5.75%,
collateralized by $17,585,000 U.S. Treasury Bills, 6.125%
due 3/31/98 (market value of collateral is $17,895,681,
including accrued interest). (cost $17,540,801). ........ $ 17,540,801 3.2
------------ -----
TOTAL INVESTMENTS (cost $455,461,233) * .................... 551,718,743 102.0
Other Assets and Liabilities ................................ (10,766,491) (2.0)
------------ -----
NET ASSETS .................................................. $540,952,252 100.0
------------ -----
------------ -----
</TABLE>
- --------------
{\/} U.S. currency denominated.
-/- Non-income producing security.
{V} Security is denominated in French Francs.
* For Federal income tax purposes, cost is $458,004,818 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 108,791,928
Unrealized depreciation: (15,078,003)
-------------
Net unrealized appreciation: $ 93,713,925
-------------
-------------
</TABLE>
Abbreviation:
ADR--American Depository Receipt
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at June 30, 1997, was concentrated in the
following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS {D}
-------------------------------------------
FIXED INCOME,
RIGHTS & SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY WARRANTS & OTHER TOTAL
- -------------------------------------- ------ ------------- ---------- -----
<S> <C> <C> <C> <C>
Austria (ASTRI/ATS) .................. 0.3 0.3
Denmark (DEN/DKK) .................... 4.5 4.5
Finland (FIN/FIM) .................... 6.7 6.7
France (FR/FRF) ...................... 17.5 17.5
Germany (GER/DEM) .................... 4.2 4.2
Ireland (IRE/IEP) .................... 1.9 1.9
Italy (ITLY/ITL) ..................... 10.2 10.2
Netherlands (NETH/NLG) ............... 16.5 16.5
Norway (NOR/NOK) ..................... 1.3 1.3
Portugal (PORT/PTE) .................. 1.6 1.6
Spain (SPN/ESP) ...................... 2.8 2.8
Sweden (SWDN/SEK) .................... 10.2 1.4 11.6
Switzerland (SWTZ/CHF) ............... 5.6 0.8 6.4
United Kingdom (UK/GBP) .............. 13.3 13.3
United States & Other (US/USD) ....... -- 1.2 1.2
------ ----- ----- -----
Total ............................... 96.6 2.2 1.2 100.0
------ ----- ----- -----
------ ----- ----- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $540,952,252.
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
STATEMENT OF ASSETS
AND LIABILITIES
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $455,461,233) (Note 1).................................... $551,718,743
U.S. currency........................................................................... $ 615
Foreign currencies (cost $2,209,620).................................................... 2,195,939 2,196,554
----------
Receivable for securities sold...................................................................... 7,095,467
Dividends and dividend withholding tax reclaims receivable.......................................... 1,029,640
Receivable for Fund shares sold..................................................................... 220,369
Miscellaneous receivable............................................................................ 28,649
Cash held as collateral for securities loaned (Note 1).............................................. 70,266,365
------------
Total assets...................................................................................... 632,555,787
------------
Liabilities:
Payable for Fund shares repurchased................................................................. 10,255,341
Payable for securities purchased.................................................................... 9,852,787
Payable for investment management and administration fees (Note 2).................................. 432,704
Payable for transfer agent fees (Note 2)............................................................ 214,167
Payable for service and distribution expenses (Note 2).............................................. 207,838
Payable for printing and postage expenses........................................................... 203,997
Payable for custodian fees (Note 1)................................................................. 74,885
Payable for registration and filing fees............................................................ 41,248
Payable for professional fees....................................................................... 20,171
Payable for Trustees' fees and expenses (Note 2).................................................... 11,761
Payable for fund accounting fees (Note 2)........................................................... 8,899
Other accrued expenses.............................................................................. 13,372
Collateral for securities loaned (Note 1)........................................................... 70,266,365
------------
Total liabilities................................................................................. 91,603,535
------------
Net assets............................................................................................ $540,952,252
------------
------------
Class A:
Net asset value and redemption price per share ($446,293,289 DIVIDED BY 31,602,167 shares
outstanding)......................................................................................... $ 14.12
------------
------------
Maximum offering price per share (100/95.25 of $14.12) *.............................................. $ 14.82
------------
------------
Class B:+
Net asset value and offering price per share ($93,279,904 DIVIDED BY 6,707,251 shares outstanding).... $ 13.91
------------
------------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($1,379,059 DIVIDED BY
97,314 shares outstanding)........................................................................... $ 14.17
------------
------------
Net assets consist of:
Paid in capital (Note 4)............................................................................ $498,407,219
Undistributed net investment income................................................................. 58,683
Accumulated net realized loss on investments and foreign currency transactions...................... (53,652,749)
Net unrealized depreciation on translation of assets and liabilities in foreign currencies.......... (118,411)
Net unrealized appreciation of investments.......................................................... 96,257,510
------------
Total -- representing net assets applicable to capital shares outstanding............................. $540,952,252
------------
------------
<FN>
- --------------
* On sales of $50,000 or more, the offering price is reduced.
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
</TABLE>
The accompanying notes are an integral part of the financial statements.
F5
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
STATEMENT OF OPERATIONS
Six months ended June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of $1,248,728)....................................... $ 4,460,572
Interest income...................................................................................... 676,910
-----------
Total investment income............................................................................ 5,137,482
-----------
Expenses:
Investment management and administration fees (Note 2)............................................... 2,655,929
Service and distribution expenses: (Note 2)
Class A............................................................................... $ 791,968
Class B............................................................................... 457,198 1,249,166
-----------
Transfer agent fees (Note 2)......................................................................... 907,444
Custodian fees (Note 1).............................................................................. 279,451
Printing and postage expenses........................................................................ 94,765
Registration and filing fees......................................................................... 87,692
Fund accounting fees (Note 2)........................................................................ 68,262
Audit fees........................................................................................... 26,014
Trustees' fees and expenses (Note 2)................................................................. 6,763
Legal fees........................................................................................... 5,456
Other expenses (Note 1).............................................................................. 98,041
-----------
Total expenses before reductions................................................................... 5,478,983
-----------
Expense reductions (Notes 1 & 5)................................................................. (400,184)
-----------
Total net expenses................................................................................. 5,078,799
-----------
Net investment income.................................................................................. 58,683
-----------
Net realized and unrealized gain (loss) on investments and foreign currencies: (Note 1)
Net realized gain on investments........................................................ 50,531,989
Net realized loss on foreign currency transactions...................................... (1,374,627)
-----------
Net realized gain during the period................................................................ 49,157,362
Net change in unrealized depreciation on translation of assets and liabilities in
foreign currencies..................................................................... (150,294)
Net change in unrealized appreciation of investments.................................... 4,943,426
-----------
Net unrealized appreciation during the period...................................................... 4,793,132
-----------
Net realized and unrealized gain on investments and foreign currencies................................. 53,950,494
-----------
Net increase in net assets resulting from operations................................................... $54,009,177
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
---------------- -----------------
Decrease in net assets
Operations:
Net investment income (loss)............................................................ $ 58,683 $ (1,938,485)
Net realized gain on investments and foreign currency transactions...................... 49,157,362 86,541,400
Net change in unrealized depreciation on translation of assets and liabilities in
foreign currencies..................................................................... (150,294) (218,619)
Net change in unrealized appreciation of investments.................................... 4,943,426 23,691,090
---------------- -----------------
Net increase in net assets resulting from operations.................................. 54,009,177 108,075,386
---------------- -----------------
Class A:
Distributions to shareholders: (Note 1)
From net realized gain on investments................................................... -- (4,360,146)
Class B:
Distributions to shareholders: (Note 1)
From net realized gain on investments................................................... -- (815,186)
Advisor Class: (Note 1)
Distributions to shareholders:
From net realized gain on investments................................................... -- (29,590)
---------------- -----------------
Total distributions................................................................... -- (5,204,922)
---------------- -----------------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested........................................ 1,158,963,510 3,224,591,371
Decrease from capital shares repurchased................................................ (1,214,320,601) (3,342,278,802)
---------------- -----------------
Net decrease from capital share transactions.......................................... (55,357,091) (117,687,431)
---------------- -----------------
Total decrease in net assets.............................................................. (1,347,914) (14,816,967)
Net assets:
Beginning of period..................................................................... 542,300,166 557,117,133
---------------- -----------------
End of period *......................................................................... $ 540,952,252 $ 542,300,166
---------------- -----------------
---------------- -----------------
* Includes undistributed net investment income of........................................ $ 58,683 $ --
---------------- -----------------
---------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F7
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A+
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1997 ---------------------------------------------------------
(UNAUDITED) (A) 1996 (A) 1995 (A) 1994 (A) 1993 (A) 1992 (A)
-------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.............. $ 12.89 $ 10.88 $ 10.03 $ 10.84 $ 8.51 $ 9.59
-------------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income (loss).................... 0.01 (0.03) 0.04 0.06 0.05 0.11**
Net realized and unrealized gain (loss) on
investments.................................... 1.22 2.16 0.95 (0.69) 2.36 (1.19)
-------------- --------- --------- --------- --------- ---------
Net increase (decrease) from investment
operations................................... 1.23 2.13 0.99 (0.63) 2.41 (1.08)
-------------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From net investment income...................... -- -- (0.10) (0.05) (0.06) --
From net realized gain on investments........... -- (0.12) (0.04) -- -- --
In excess of net investment income.............. -- -- -- -- (0.02) --
In excess of net realized gain on investments... -- -- -- (0.13) -- --
-------------- --------- --------- --------- --------- ---------
Total distributions........................... -- (0.12) (0.14) (0.18) (0.08) --
-------------- --------- --------- --------- --------- ---------
Net asset value, end of period.................... $ 14.12 $ 12.89 $ 10.88 $ 10.03 $ 10.84 $ 8.51
-------------- --------- --------- --------- --------- ---------
-------------- --------- --------- --------- --------- ---------
Total investment return (d)....................... 9.54% (c) 19.61% 9.86% (5.8)% 28.3% (11.3)%
Ratios and supplemental data:
Net assets, end of period (in 000's).............. $446,293 $453,792 $483,375 $646,313 $854,701 $781,607
Ratio of net investment income (loss) to average
net assets....................................... 0.13% (b) (0.26)% 0.38% 0.61% 0.6% 1.2%**
Ratio of expenses to average net assets:
With expense reductions (Notes 1 & 5)........... 1.75% (b) 1.82% 1.83% 1.73% 1.9% 2.0%**
Without expense reductions...................... 1.90% (b) 1.88% 1.89% 1.81% --* --*
Portfolio turnover rate++++....................... 94% (b) 123% 108% 91% 67% 65%
Average commission rate per share paid on
portfolio transactions++++....................... $ 0.0726 $ 0.0277 N/A N/A N/A N/A
</TABLE>
- ----------------
+ All capital shares issued and outstanding as of March 31, 1993, were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
the basis of the Fund as a whole without distinguishing between the
classes of shares issued.
* Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
* * Includes reimbursement by Chancellor LGT Asset Management, Inc. of
Fund Class A operating expenses of less than one cent per share.
Without such reimbursement, the ratio of expenses to average net
assets would have been 2.1% and the ratio of net investment income to
average net assets would have been 1.2%.
(a) Calculated based upon weighted average shares outstanding during the
period.
(b) Annualized.
(c) Not Annualized.
(d) Total investment return does not include sales charges.
N/A Not applicable.
The accompanying notes are an integral part of the financial statements.
F8
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS B++
---------------------------------------------------------------
APRIL 1,
SIX MONTHS 1993
ENDED YEAR ENDED DECEMBER 31, TO
JUNE 30, 1997 ------------------------------- DECEMBER 31,
(UNAUDITED) (A) 1996 (A) 1995 (A) 1994 (A) 1993 (A)
-------------- --------- -------- -------- ------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.............. $ 12.73 $ 10.81 $ 9.97 $ 10.79 $ 9.02
-------------- --------- -------- -------- ------------
Income from investment operations:
Net investment income (loss).................... (0.03) (0.11) (0.03) -- --
Net realized and unrealized gain (loss) on
investments.................................... 1.21 2.15 0.94 (0.69) 1.85
-------------- --------- -------- -------- ------------
Net increase (decrease) from investment
operations................................... 1.18 2.04 0.91 (0.69) 1.85
-------------- --------- -------- -------- ------------
Distributions to shareholders:
From net investment income...................... -- -- (0.03) -- (0.06)
From net realized gain on investments........... -- (0.12) (0.04) -- --
In excess of net investment income.............. -- -- -- -- (0.02)
In excess of net realized gain on investments... -- -- -- (0.13) --
-------------- --------- -------- -------- ------------
Total distributions........................... -- (0.12) (0.07) (0.13) (0.08)
-------------- --------- -------- -------- ------------
Net asset value, end of period.................... $ 13.91 $ 12.73 $ 10.81 $ 9.97 $ 10.79
-------------- --------- -------- -------- ------------
-------------- --------- -------- -------- ------------
Total investment return (d)....................... 9.27% (c) 18.79% 9.20% (6.38)% 20.5% (c)
Ratios and supplemental data:
Net assets, end of period (in 000's).............. $ 93,280 $ 87,092 $73,025 $81,602 $ 34,048
Ratio of net investment income (loss) to average
net assets....................................... (0.52)% (b) (0.91)% (0.27)% (0.04)% (0.1)% (b)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 & 5)........... 2.40% (b) 2.47% 2.48% 2.38% 2.6% (b)
Without expense reductions...................... 2.55% (b) 2.53% 2.54% 2.46% --*
Portfolio turnover rate++++....................... 94% (b) 123% 108% 91% 67%
Average commission rate per share paid on
portfolio transactions++++....................... $ 0.0726 $ 0.0277 N/A N/A N/A
</TABLE>
- ----------------
+ All capital shares issued and outstanding as of March 31, 1993, were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
the basis of the Fund as a whole without distinguishing between the
classes of shares issued.
* Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
* * Includes reimbursement by Chancellor LGT Asset Management, Inc. of
Fund Class A operating expenses of less than one cent per share.
Without such reimbursement, the ratio of expenses to average net
assets would have been 2.1% and the ratio of net investment income to
average net assets would have been 1.2%.
(a) Calculated based upon weighted average shares outstanding during the
period.
(b) Annualized.
(c) Not Annualized.
(d) Total investment return does not include sales charges.
N/A Not applicable.
The accompanying notes are an integral part of the financial statements.
F9
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
ADVISOR CLASS+++
--------------------------------------------
SIX MONTHS JUNE 1, 1995
ENDED YEAR ENDED TO
JUNE 30, 1997 DECEMBER 31, DECEMBER 31,
(UNAUDITED) (A) 1996 (A) 1995 (A)
-------------- ------------ ------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period............................................ $ 12.92 $ 10.85 $ 10.24
-------------- ------------ ------------
Income from investment operations:
Net investment income (loss).................................................. 0.04 0.01 0.08
Net realized and unrealized gain (loss) on investments........................ 1.21 2.18 0.71
-------------- ------------ ------------
Net increase (decrease) from investment operations.......................... 1.25 2.19 0.79
-------------- ------------ ------------
Distributions to shareholders:
From net investment income.................................................... -- -- (0.14)
From net realized gain on investments......................................... -- (0.12) (0.04)
In excess of net investment income............................................ -- -- --
In excess of net realized gain on investments................................. -- -- --
-------------- ------------ ------------
Total distributions......................................................... -- (0.12) (0.18)
-------------- ------------ ------------
Net asset value, end of period.................................................. $ 14.17 $ 12.92 $ 10.85
-------------- ------------ ------------
-------------- ------------ ------------
Total investment return (d)..................................................... 9.67% (c) 20.21% 7.75% (c)
Ratios and supplemental data:
Net assets, end of period (in 000's)............................................ $ 1,379 $ 1,416 $ 718
Ratio of net investment income (loss) to average net assets..................... 0.48% (b) 0.09% 0.73% (b)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 & 5)......................................... 1.40% (b) 1.47% 1.48% (b)
Without expense reductions.................................................... 1.55% (b) 1.53% 1.54% (b)
Portfolio turnover rate++++..................................................... 94% (b) 123% 108%
Average commission rate per share paid on portfolio transactions++++............ $0.0726 $0.0277 N/A
</TABLE>
- ----------------
+ All capital shares issued and outstanding as of March 31, 1993, were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
the basis of the Fund as a whole without distinguishing between the
classes of shares issued.
* Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
* * Includes reimbursement by Chancellor LGT Asset Management, Inc. of
Fund Class A operating expenses of less than one cent per share.
Without such reimbursement, the ratio of expenses to average net
assets would have been 2.1% and the ratio of net investment income to
average net assets would have been 1.2%.
(a) Calculated based upon weighted average shares outstanding during the
period.
(b) Annualized.
(c) Not Annualized.
(d) Total investment return does not include sales charges.
N/A Not applicable.
The accompanying notes are an integral part of the financial statements.
F10
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
NOTES TO
FINANCIAL STATEMENTS
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Europe Growth Fund ("Fund"), is a separate series of GT Global Growth
Series ("Company"). The Company is organized as a Massachusetts business trust
and is registered under the Investment Company Act of 1940, as amended ("1940
Act"), as an open-end management investment company. The Company has eight
diversified series of shares in operation, each series corresponding to a
distinct portfolio of investments.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective distribution expenses, and may differ
in its transfer agent, registration, and certain other class-specific fees and
expenses.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles, and
therefore the financial statements may include certain estimates from
management.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of Fund shares and completes orders to
purchase, exchange or repurchase Fund shares on each business day, with the
exception of those days on which the New York Stock Exchange is closed.
Equity securities are valued at the last sale price on the exchange on which
such securities are traded or on the principal over-the-counter market in which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. (the "Manager") to be the primary market.
Fixed income investments are valued at the mean of representative quoted bid and
asked prices for such investments or, if such prices are not available, at
prices for investments of comparative maturity, quality and type; however, when
the Manager deems it appropriate, prices obtained for the day of valuation from
a bond pricing service will be used. Short-term investments with a maturity of
60 days or less are valued to amortized cost, adjusted for foreign exchange
translation and market fluctuation, if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Fund's Board of Trustees.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund after translation to U.S.
dollars based on the exchange rates on that day. The cost of each security is
determined using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuation
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains and losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. government securities or other
high quality debt securities of which the value, including accrued interest, is
at least equal to the amount to be repaid to the Fund under each agreement at
its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of a contract or if the value of the currency changes
unfavorably. The Fund may enter
F11
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
into Forward Contracts in connection with planned purchases or sales of
securities, or to hedge against adverse fluctuations in exchange rates between
currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
market-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of an over-the-counter option, is valued at the average
of the last bid prices obtained from brokers, unless a quotation from only one
broker is available, in which case only that broker's price will be used. If an
option expires on its stipulated expiration date or if the Fund enters into a
closing purchase transaction, a gain or loss is realized without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is extinguished. If a written call option is exercised, a gain or
loss is realized from the sale of the underlying security and the proceeds of
the sale are increased by the premium originally received. If a written put
option is exercised, the cost of the underlying security purchased would be
decreased by the premium originally received. The Fund can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security, and, for a put, requires the Fund to set aside cash, U.S. government
securities or other liquid securities in an amount not less than the exercise
price or otherwise provide adequate cover at all times while the put option is
outstanding. The Fund may use options to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At June 30, 1997, stocks with an aggregate value of approximately $65,561,434
were on loan to brokers. The loans were secured by cash collateral of
$70,266,365, received by the Fund. Cash collateral is received by the Fund
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For the period ended June 30, 1997,
the Fund received securities lending fees of $232,681. Fees received from
securities loaned were used to reduce the Fund's custodian and administrative
expenses.
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, or excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$100,715,450, of which $96,233,015 expires in 2000 and $4,482,435 expires in
2001.
F12
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
(J) DISTRIBUTION TO SHAREHOLDERS
Distribution to shareholders are recorded by the Fund on the ex-date. Income and
capital gain distributions are determined in accordance with Federal income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund and timing differences.
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets,
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
(L) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
(M) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
(N) LINE OF CREDIT
The Fund, along with certain other funds advised by the Manager, has a line of
credit with BankBoston and State Street Bank. The arrangements with the banks
allow the Fund to borrow an aggregate maximum amount of $200,000,000. The Fund
is limited to borrowing up to 33 1/3% of the value of the Fund's total assets.
For the period ended June 30, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
was $14,426,759 with a weighted average interest rate of 6.07%. Interest expense
for the period ended June 30, 1997, was $70,522, included in "Other expenses" on
the Statement of Operations.
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Fund's investment manager and
administrator. The Fund pays investment management and administration fees at
the following annualized rates: 0.975% on the first $500 million of the average
daily net assets of the Fund; 0.95% on the next $500 million; 0.925% on the next
$500 million and 0.90% on amounts thereafter. These fees are computed daily and
paid monthly, and are subject to reduction in any year to the extent that the
Fund's expenses (exclusive of brokerage commissions, taxes, interest,
distribution-related expenses and extraordinary expenses) exceed the most
stringent limits prescribed by the laws or regulations of any state in which the
Fund's shares are offered for sale, based on the average total net asset value
of the Fund.
GT Global, Inc., an affiliate of the Manager, serves as the Fund's distributor.
The Fund offers Class A, Class B, and Advisor Class shares for purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the period ended June 30, 1997, GT Global retained $17,085
of such sales charges. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected CDSCs in the
amount of $21,522 for the period ended June 30, 1997. GT Global also makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSC's, in accordance with the Fund's current
prospectus. During the period ended June 30, 1997, GT Global collected CDSC's in
the amount of $211,559. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Trustees has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for its expenditures incurred in servicing and maintaining
shareholder accounts, and may pay GT Global a distribution fee at the annualized
rate of up to 0.35% of the average daily net assets of the Fund's Class A
shares, less any amounts paid by the Fund as the aforementioned service fee, for
its expenditures incurred in providing services as distributor. All expenses for
which GT Global is reimbursed under the Class A Plan will have been incurred
within one year of such reimbursement.
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for its expenditures incurred in servicing and maintaining
shareholder accounts, and may pay GT Global a distribution fee at the annualized
rate of up to 0.75% of the average daily net assets of the Fund's Class B shares
for its expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually may be carried
forward for reimbursement in subsequent years as long as that Plan continues in
effect.
F13
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
The Manager and GT Global have voluntarily undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest and extraordinary
items) to the maximum annual level of 2.25%, and 2.90%, and 1.90% of the average
daily net assets of the Fund's Class A, Class B and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
The Company pays each of its Trustees who is not an employee, officer or
director of GT Capital, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Trustee.
3. PURCHASES AND SALES OF SECURITIES
For the period ended June 30, 1997, purchases and sales of investment securities
by the Fund, other than U.S. government obligations and short-term investments,
aggregated $239,776,963 and $299,635,593, respectively. There were no purchases
or sales of U.S. government obligations by the Fund during the period.
4. CAPITAL SHARES
At June 30, 1997, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the Fund
were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
------------------------------------- --------------------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- --------------- -------------------- ---------------- --------------------
<S> <C> <C> <C> <C>
Shares sold............................. 74,187,713 $ 978,539,574 247,661,557 $ 2,968,073,960
Shares issued in connection with
reinvestment of distributions......... -- -- 261,336 3,297,924
--------------- -------------------- ---------------- --------------------
74,187,713 978,539,574 247,922,893 2,971,371,884
Shares repurchased...................... (77,803,899) (1,031,157,890) (257,136,969) (3,090,222,730)
--------------- -------------------- ---------------- --------------------
Net decrease............................ (3,616,186) $ (52,618,316) (9,214,076) $ (118,850,846)
--------------- -------------------- ---------------- --------------------
--------------- -------------------- ---------------- --------------------
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
------------------------------------- --------------------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- --------------- -------------------- ---------------- --------------------
<S> <C> <C> <C> <C>
Shares sold............................. 12,225,611 $ 160,392,499 15,643,994 $ 188,596,754
Shares issued in connection with
reinvestment of distributions......... -- -- 53,171 663,732
--------------- -------------------- ---------------- --------------------
12,225,611 160,392,499 15,697,165 189,260,486
Shares repurchased...................... (12,358,370) (162,879,331) (15,609,973) (188,238,304)
--------------- -------------------- ---------------- --------------------
Net increase (decrease)................. (132,759) $ (2,486,832) 87,192 $ 1,022,182
--------------- -------------------- ---------------- --------------------
--------------- -------------------- ---------------- --------------------
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
------------------------------------- --------------------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- --------------- -------------------- ---------------- --------------------
<S> <C> <C> <C> <C>
Shares sold............................. 1,529,210 $ 20,031,437 5,230,224 $ 63,929,457
Shares issued in connection with
reinvestment of distributions......... -- -- 2,336 29,544
--------------- -------------------- ---------------- --------------------
1,529,210...... 20,031,437 5,232,560 63,959,001
Shares repurchased...................... (1,541,531) (20,283,380) (5,189,081) (63,817,768)
--------------- -------------------- ---------------- --------------------
Net increase (decrease)................. (12,321) $ (251,943) 43,479 $ 141,233
--------------- -------------------- ---------------- --------------------
--------------- -------------------- ---------------- --------------------
</TABLE>
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the period ended June 30, 1997, the Fund's expenses
were reduced by $167,503 under these arrangements.
F14
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
GT GLOBAL FUNDS
GT GLOBAL OFFERS A BROAD RANGE OF FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE GT GLOBAL
FUNDS, PLEASE CONTACT YOUR INVESTMENT ADVISOR OR CALL GT GLOBAL DIRECTLY AT
1-800-824-1580. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION, INCLUDING
CHARGES, EXPENSES AND THE RISKS OF GLOBAL AND EMERGING MARKET INVESTING.
INVESTORS SHOULD READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
GT GLOBAL WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
GT GLOBAL INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside the U.S.
GT GLOBAL EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
/ / GLOBAL FUNDS
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Focuses on worldwide opportunities from the demand for consumer products and
services
GT GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain infrastructure
GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
/ / REGIONALLY DIVERSIFIED FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan
GT GLOBAL EUROPE GROWTH FUND
Focuses on investment opportunities in the new, unified Europe
GT GLOBAL LATIN AMERICA GROWTH FUND
Invests in the emerging markets of Latin America
/ / SINGLE COUNTRY FUNDS
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
Invests in equity securities of small U.S. companies
GT GLOBAL AMERICA MID CAP GROWTH FUND
Concentrates on medium-sized companies in the U.S.
GT GLOBAL AMERICA VALUE FUND
Concentrates on equity securities of large cap U.S. companies believed to be
undervalued
GT GLOBAL JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND INCOME FUND
GT GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government securities
from around the world
INCOME FUNDS
GT GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities
GT GLOBAL STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets
GT GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets
GT GLOBAL FLOATING RATE FUND
Invests primarily in senior secured floating rate loans that have the potential
to achieve a high level of current income
MONEY MARKET FUND
GT GLOBAL DOLLAR FUND
Invests in high quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
[LOGO]
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
<PAGE>
[LOGO]
GT Global, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624
DATED MATERIAL
PLEASE EXPEDITE
GT GLOBAL EUROPE GROWTH FUND
EURSR708086M
